Economists normally assume that the goal of a firm is to:
a. sell as many units of output as possible
b. maximize profits.
c. sell products at the highest prices possible.
d. maximize sales revenue.
b
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Consider a closed economy without the government. If the GDP of the economy is $63,000 and the consumption in the economy is $45,000, the savings rate in the economy is:
A) 35.75%. B) 28.57%. C) 16.86%. D) 24%.
If the quantity of bank reserves held at the Fed increases, ________
A) the real interest rate increases B) bank deposits decrease C) the number of loans issued by banks decrease D) inflation increases
Explain the issues involved with the Fed acting as a lender of Last Resort (LLR)
What will be an ideal response?
A deficit nation in a fixed exchange rate system can improve its balance of payments by increasing
a. its money supply. b. its interest rates. c. its level of real GDP. d. aggregate demand.